Question

A trader at the Kewar Stock Exchange took a SHORT POSITION in 100 shares of the Mitha kora at Tk.46.00 per share. The initial margin requirement was 40 percent while the maintenance margin is 30 percent of current market price. Determine the initial margin, maintenance margin, and the amount of replenishment if the price of Pyera stock changes to (a) Tk.38.00, (b) Tk.48.00, and © Tk.52.00.

Answer 1

	Amt Tk
Short position with 100 shares @Tk. 46.00 per share
Total Contract Price =100*46= Tk. 4600
Initial Margin=40% =40%*4600=Tk. 1840
Ans a.	Contract =Tk 4600
Margin Details
Price of Stock	Initial Margin	Settlement Price	Daily Gain/(Loss)	Margin A/c balance	Maintenance Margin	Amt of replenishment
Initial short position @46	1,840	-	-	1,840	1,380
Tk 38 /share	1,840	3,800	(800)	1,040		340
Ans b.	Contract =Tk 4600
Margin Details
Price of Stock	Initial Margin	Settlement Price	Daily Gain/(Loss)	Margin A/c balance	Maintenance Margin	Amt of replenishment
Initial short position @46	1,840	-	-	1,840	1,380
Tk 48 /share	1,840	4,800	(200)	1,640		-
Ans c.	Contract =Tk 4600
Margin Details
Price of Stock	Initial Margin	Settlement Price	Daily Gain/(Loss)	Margin A/c balance	Maintenance Margin	Amt of replenishment
Initial short position @46	1,840	-	-	1,840	1,380
Tk 52/share	1,840	5,200	(600)	1,240		140